Press Releases

LEUMI TO PURCHASE INSURANCE POLICY FOR GUARANTEES GIVEN BY THE BANK TO SECURE HOUSING LOANS

February 18, 2016

As part of Leumi’s preparations to meet its capital ratio targets (under Basel III), the Bank announced today that it is in process of signing an agreement with international reinsurers - with a high international rating - to purchase an insurance policy for the Bank's current portfolio of 'Sales Law Guarantees', i.e. guarantees issued by the Bank to purchasers of residential homes in order to insure their money in the event of non-delivery of the apartment by the contractor (by virtue of the Sales Law, 1973).

The insurance policy will protect the Bank in the event it is required to pay because of a forfeiture of the guarantees, for any reason. This move is intended to reduce the equity that the Bank will be required to allocate for the credit risk arising from the issuance of these guarantees, by using the policy for "mitigating credit risk". This will allow the Bank to reduce its volume of risk assets and to improve its capital adequacy ratio.